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Troubled north coast miner resumes operations

Home Business Management Finance & Investment Troubled north coast miner resumes operations

RIO Tinto’s troubled subsidiary, Richards Bay Minerals (RBM), has resumed operations after shutting down on 30 June 2021 following a string of violent incidents culminating in the murder of its general manager.

The mining multinational’s Chief Executive Minerals Sinead Kaufman said the reopening follows a stabilisation of the security situation around the mine, supported by the national and provincial government, as well as substantive engagement with host communities and their traditional authorities.

“The safety and security of our people has been our priority throughout, and we recognise the collaboration and constructive dialogue we have had with all stakeholders to get us into a position where we can restart operations and resume contributing to the host communities, KwaZulu-Natal and South Africa.

“I also acknowledge the resilience and dedication shown by all our people at RBM over the past weeks,” Kaufman said, adding operations would be ramping up to capacity “as soon as possible”.

RBM has been plagued by security issues and violent incidents for two years, which it blamed for its decision to suspend a planned $463-million investment in its Zulti South project aimed at extending the economic life of the operation.

The unrest came to a head in May when then GM Nico Swart was shot dead while travelling to work during May. This prompted the company to halt operations and shut down its facilities on June 30. It also declared force majeure, a clause which absolves it of its contractual obligations to clients in the event of an extraordinary event or circumstance beyond its control.

The agreement between the company and community stakeholders which paved the way to the reopening includes the release of R130 million to community trusts established for each of the communities surrounding the mining and smelter operation.

RBM said in a statement that the agreement would “support enhanced governance and controls of community trusts, together with greater transparency [and] signifies the parties’ commitment to working together towards modernising the community trusts and to ensuring that the trusts achieve their objective of delivering broad-based benefits for members of host communities.”

MD Werner Duvenhage described the agreement as a major milestone. “With the agreement in place, we believe that together with the visible improvements on the safety and security front and support from the provincial and national governments and host communities, including reaching an earlier agreement with the Sokhulu Youth Forum, RBM has made good progress on the core issues that have kept our business closed over the past several weeks.”

Kaufman said the overall impact of the suspension of operations, including the shutdown of furnace number 4 was still to be assessed. “At this time, the force majeure declared on customer contracts remains in place.”

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